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Paper

Application of Combined SWOT and AHP: A CaseStudy for a Manufacturing Firm

Authors: Ali Gorener, Kerem Toker, Korkmaz, Ulucay

Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 1 / 15

Contents

Contents

AHP- Analytic Hierarchy ProcessApplying AHP in SWOT analysis (Strengths, Weaknesses,Opportunities and Threats Analysis)

Aim of this case sudy:Analysing SWOT subfactors of a manufacturing firm in TurkeyRanking the factors and subfactors


HIERARCHICAL STRUCTURE

MODEL 1

GOAL: Ranking Factors and subfactors

Factor 2 Factor 3Factor 1 . . .

Subfactor 1

Subfactor 2

.

.

.

Subfactor k

Subfactor 1

Subfactor 2

.

.

.

Subfactor m

Subfactor 1

Subfactor 2

.

.

.

Subfactor n

Prioritizing factorsPrioritizing subfactors locally or globally



MODEL 2(proposed 5 criteria and 3 alternatives)

GOAL: Ranking Alternatives

Criterion 3Criterion 2Criterion 1 Criterion 4 Criterion 5

Alternative 2Alternative 1 Alternative 3

Prioritizing criteriaPrioritizing alternatives based on each criterionOrdering the preferences of alternatives



Model 2Table of Weights

Decisive CriterionC1 C2 C3 C4 C5

Alternatives w1 w2 w3 w4 w5 WeightA1 a11 a12 a13 a14 a15 p1A2 a21 a22 a23 a24 a25 p2A3 a31 a32 a33 a34 a35 p3


Saaty Scale

Pairwise Comparison Scale- Saaty Scale

Importance Explanation1 Two criteria contribute equally to the objective3 Experience and judgment slightly favor one over another5 Experience and judgment strongly favor one over another7 Criterion is strongly favored and its dominance is demonstrated in practice9 Importance of one over another affirmed on the highest possible order

2,4,6,8 Used to represent compromise between the priorities listed above


Decision Matrix

Pairwise Comparison Matrix

A=

a11 a12 . . . a1na21 a22 . . . a2n

...an1 an2 . . . ann

aij : the importance of criterion Ai compared to criterion Aj in SaatyScaleaij = 1/aji or reciprocal


Decision Matrix

Theoretical Weight Quotient Matrixof Criteria A1, . . . ,An

A1 A2 . . .AnA1A2. . .An

w1/w1 w1/w2 . . .w1/wnw2/w1 w2/w2 . . .w2/wn. . .

wn/w1 wn/w2 . . .wn/wn

︸︷︷︸

W

w1w2. . .wn

︸︷︷︸

w

= n

w1w2. . .wn

︸︷︷︸

w

wi is the theoretical/absolute weight of criterion Ai in group(A1,A2, . . . ,An)


Decision Matrix

Theoretical matrix W and Pairwise comparison matrix A

Matrix W is reciprocal and consistent, i.e. aij = 1/aji , aijajk = aikwhile matrix A may not be consistentW has rank 1 and its max eigenvalue equals n (λmax = n)The largest eigenvalue of A is greater or equal to nConsistency Index (CI) of A:

CI =λmax − n

n − 1

λmax is A’s largest eigenvalueConsistency Ratio (CR) of A:

CR =CIRI

RI is the Random Index


Decision Matrix

Calculating weights of criteria

Row Geometric Mean Prioritization Method

wi =

n

√n∏

j=naij

n∑i=1

n

√n∏

j=naij

Normalizing sums over rows with a large power

w =Ake

eT Ake, e = (1,1, . . . ,1)


SWOT Analysis


SWOT Analysis

Environment Scan

Internal Analysis External Analysis

Strengths

S1

S2

S3

S4

S5

Weaknesses

W1

W2

W3

W4

W5

W6

W7

Opportunities

O1

O2

O3

Threats

T1

T2

T3

T4

T5

T6

T7


Overall Priority Scores of SWOT Factors

OVERALL PRIORITY SCORES OF SWOT FACTORS


Overall Priority Scores of SWOT Factors

REFERENCES

[1] Ali Gorener, Kerem Toker, Korkmaz, Ulucay, Application ofCombined SWOT and AHP: A Case Study for a ManufacturingFirm, Social and Behavioral Sciences 58 (2012) 1525-1534.

[2] Thomas L. Saaty, How to make a decision: The AnalyticHierarchy Process, European Journal of Operational Research 48(1990) 9-26.


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